Syndication gains ground among borrowers, ING survey shows

European real estate borrowers see the need for syndication as a way to diversify their funding sources, according to a recent survey by ING Real Estate Finance (REF).

Indeed, clients also seem willing to pay extra for it, the survey found.

The industry is resilient and willing to deploy different approaches, Jan-Evert Post, member of the Global Management Team at ING Real Estate Finance, said. 'This survey sheds light on a transforming industry, well placed to capitalise on the opportunities that increased economic growth will provide. More use of diversified cash flows from a portfolio of properties as basis for a loan structure will benefit borrowers and lenders alike, especially now players recognise that funding must come from a variety of sources - including non-bank lenders. These trends, together with a strong on-the-ground relationship between borrower and lender, will definitely assist in regenerating the industry.'

Among other findings, the survey highlights the benefits of increasingly diversified portfolio lending. Borrowers have recognised that single asset lending is not the only optimal funding strategy, Post said. The survey also found that clients increasingly value the local knowledge and relationship with a specialist real estate lender based in their country, he added.

The 2013 Nyenrode Survey was conducted by Nyenrode Business University from the Netherlands and ING Real Estate Finance (ING REF), amongst ING Real Estate Finance’s clients in the European Listed & Institutional Real Estate sector.